6. How can married persons report their salary income?

6. How can married persons report their salary income?

Married persons can choose "separate taxation" or "joint assessment":

i) Separate taxation

A husband and a wife are treated as separate individuals. Each is required to: 

• complete Tax Return – Individuals,
• declare his/her income,
• claim expenses (and deductions), and
• pay any tax due.

ii) Joint assessment (applicable only if advantageous)

If the earnings of one spouse are less than his/her tax allowance, allowance may not be fully utilised when the husband and wife are assessed separately under separate taxation. If a couple chooses to have a “joint assessment”, income and allowances for both husband and wife will be added together, and the married person's allowance will be deducted from their joint total income. Obviously, this will result in some savings in tax for the married couple.

Hence, where it appears that a joint tax bill may be smaller than your two tax bills added together, both you and your spouse should choose the “joint assessment” option in each of your Tax Returns on a year-by-year basis. While both the husband and wife must still file Tax Returns, if making the choice will reduce the total amount of taxes payable by the couple, only one notice of assessment will be sent out on their combined income from salaries, typically to the spouse who earns the higher amount of money and will demand payment of the tax. 

Where joint assessment is elected, the spouses of a married couple must nominate one of them to be the person liable for the tax payable on their aggregated net chargeable income.

If a joint assessment does not result in less tax, the Assessor will automatically issue separate tax bills to each of you instead.

Please note that there is a time limit for the selection/withdrawal of a joint assessment. After initially choosing to have a joint assessment, should you change your mind and withdraw your selection, you will not be allowed to request a joint assessment again in the same year of assessment.

An election or withdrawal of joint assessment must be made:

• within that year of assessment or the following year of assessment; or
• within 1 month after the assessment for the year of assessment becomes final and conclusive, whichever is the later; or
• within such further time, if any, as the Commissioner of Inland Revenue may allow as being reasonable in the circumstances. 

Any married couple may choose “joint assessment” under Hong Kong Salaries Tax regulations, irrespective of their residential status. The point to note for joint assessment is that both spouses should have income assessable to Hong Kong Salaries Tax for the specific year of assessment in question.